Before Starting His Landscape Business, Andrew Took a Marketing Class

question 16

Multiple Choice

Before starting his landscape business, Andrew took a marketing class at the local community college. He decided that his time would be better utilized in this class because if he could learn to sell his services well, the revenues and profits would follow. Your assessment of his plan might include which of the following:

• A) Andrew understands that marketing is the life-blood of the company, and he is right on track with his approach.
• B) Andrew has elected to operate like a virtual company and leave various parts of the business including accounting, environmental trends scanning, and management to outsourcers.
• C) Andrew knows that increasing revenues will always keep the business profitable and in a positive cash position.
• D) Andrew needs to realize that the ability to understand and interpret financial statements provided by his accountant might enhance his profits.

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Definitions:

Debt

Money owed by one party to another under the condition that it will be repaid, often with interest, at a future date.

Liquidity

A measure of how quickly and easily an asset can be converted into cash without significantly affecting its market price.

Asset Management

The systematic process of developing, operating, maintaining, and selling assets in a cost-effective manner to maximize their value and investment return.

Profitability

A measure of the efficiency and effectiveness of a company in generating profit from its operations over a specific period.